DDG Weekly Update

DDG Prices Remain Strong

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DTN's average weekly spot price for dried distillers grains was up 1 cent at $143 per ton, as tight supplies continue to be supportive to prices. (DTN file photo by Elaine Shein)

OMAHA (DTN) -- The DTN average distillers dried grain (DDG) spot price from the 39 locations DTN collects bids from was $143 for the week ended Jan. 18, 1 cents higher than the prior week.

Based on the average of bids collected by DTN, the value of DDG relative to corn for the week ended Jan. 18 was at 113.91%, and the value of DDG relative to soybean meal was at 43.54%. The cost per unit of protein for DDG was $5.30, compared to the cost per unit of protein for soybean meal at $6.91, 39 cents higher versus last week (see chart below) as soymeal prices saw strong gains all week. The higher soybean meal price is causing more DDG demand for livestock feed rations, further adding support to prices.

A merchandiser out west told DTN that slow loadings of corn from the Midwest and strong values in the Midwest for modified DDG is keeping supplies out to the West Coast rather tight. Overall, supplies have been tight due to cold weather and plant slowdowns. That may change going forward as the recent EIA report showing ethanol plant output topped 1.0 million barrels per day (bpd) again after briefly dipping below the mark the week prior and for the first time since early October. For the week ending Jan. 12, EIA reported plant output up 65,000 bpd to 1.061 million bpd last week.

The U.S. Grains Council (USGC) noted in its weekly price update that trade volume has been reported as "light" with sellers defending asking prices and buyers somewhat unwilling to chase prices higher. Prices for 40-foot containers to Southeast Asia are higher again this week, gaining $5 per metric ton (mt) on average. February shipments to Myanmar increased the most of any Asian destination this week, gaining $7/mt, while shipments to Indonesia and China increased $6/mt each, according to USGC.

CIF (cost, insurance and freight) NOLA (News Orleans, Louisiana) prices were stronger from one week ago, but January prices this week have backed off a little. This could partially be due to tight supplies as well as the U.S. river system still under siege from ice.

The Upper Ohio River was closed earlier in the week due to barge breakaways over the weekend in that area caused by heavy ice movement. There is still limited movement due to ice above the Hannibal Lock, but in the Lower Ohio River, Lock 52 and 53 are now open for traffic. The Illinois River is also plagued with floating ice, which is causing "significant tow size reduction" according to American Commercial Barge Line (ACBL). Also, conditions have deteriorated above Hennepin, (MM207) due to low temperatures and ice gorging. There is hope a warming trend over the weekend will bring some relief. ACBL also noted that there is a reduction in tow size in the Lower Mississippi River at MM483-487 due to low water and "lack of a defined channel."

CURRENT CURRENT CHANGE
COMPANY STATE 1/18/2018 1/11/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $160 $160 $0
Modified $80 $80 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $144 $6
Indiana Dry $150 $145 $5
Iowa Dry $135 $133 $2
Michigan Dry $155 $150 $5
Minnesota Dry $140 $135 $5
North Dakota Dry $150 $145 $5
New York Dry $170 $160 $10
South Dakota Dry $140 $140 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $150 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $150 $150 $0
Iowa Dry $130 $130 $0
Michigan Dry $148 $148 $0
Minnesota Dry $130 $130 $0
Missouri Dry $150 $150 $0
Ohio Dry $148 $148 $0
South Dakota Dry $135 $135 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $145 $5
Wet $60 $60 $0
Illinois Dry $155 $150 $5
Nebraska Dry $150 $145 $5
Wet $60 $60 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $150 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $140 $140 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $150 $150 $0
New York Dry $155 $155 $0
North Dakota Dry $145 $145 $0
Ohio Dry $145 $145 $0
South Dakota Dry $135 $135 $0
Wisconsin Dry $140 $140 $0
Valero Energy Corp, San Antonio, TX (402-932- 5299)
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $145 $145 $0
Ohio Dry $140 $140 $0
South Dakota Dry $125 $125 $0
California $202 $202 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $212 $212 $0
*Prices listed per ton.
Weekly Average $143 $142 $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

**

VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 1/18/2018 $3.5150 $125.54
Soybean Meal 1/18/2018 $328.40
DDG Weekly Average Spot Price $143.00
DDG Value Relative to: 1/18 1/12
Corn 113.91% 114.00%
Soybean Meal 43.54% 45.87%
Cost Per Unit of Protein:
DDG $5.30 $5.26
Soybean Meal $6.91 $6.52
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

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Mary Kennedy

Mary Kennedy
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